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Obama seeks to reassure faith in U.S. credit

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"investors will stand by the United States"

Or they can abandon the United States for more lucrative investments in other countries. Whatever.

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“We don’t anticipate a scenario at the moment where the United States could quickly return to AAA.”

perhaps it will continue to be downgraded.

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This line made me laugh...

he actually pushed for the type of deal that might have prevented a downgrade

So funny, and so not true. He pushed for a deal that would raise the debt ceiling, and insisted that so many things were untouchable, that saying he pushed for a deal that would have prevented a downgrade, is a joke. A deal like that would have needed to trim at minimum, 4 trillion from the projected deficit over 10 years. And his insistance on no cuts or changes to medicare and other entitlement programs means it simply cannot be done. If he had really been pushing for a deal like that, Republicans and the Tea Party would have actually supported him. The one plan that did pass, that would have addressed the issue, never got a hearing in 'Dirty' Harry's Senate, and he threatened to veto it anyway.

“Our problems are eminently solvable,” he said. “We know what we have to do to solve them.

One of the few things Obama has said thats right. To solve them, all we need to do is cut spending, and throw him out of office. Getting someone, even half incomptent would be a huge step up from the idiot we currently have inhabiting the white house.

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Over 1,000% in debt due to total debt and liabilities. Who in their right mind would buy US debt?

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That huge sucking sound you hear is what it sounds like when $1 trillion as subtracted from an economy already in a liquidity trap.

Did any of you guys above notice that it was stock prices that fell, and that bond prices rose? - this is because people feel aggregate demand int he US will drop, affecting corporate profits; they are not concerned about the fiscal stability of the government at all. They never were; the whole debt crisis was manufactured by the Tea Party and shoved down America's throat. You see now what happens when amateurs try to play economist.

Keynesian economics is not dead; it's just being very foolishly ignored by the people that need it most.

-1 ( +0 / -1 )

So President Obama holds a news conference during the middle of a market meltdown to reassure the markets that everything is fine. The result - a prompt 200 point drop. He has been wearing out his teleprompter over the past few weeks and every time he opens his mouth either the stock market and/or his approval ratings take another dive. He just can't help himself. He goes out of his way to make sure that everyone knows that although he has been the president for nearly three years now, he is in no way responsible for the huge disaster known as the American economy. It's always someone elses fault. His motto - 'the buck stops anywhere other than here'.

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They never were; the whole debt crisis was manufactured by the Tea Party and shoved down America's throat.

Honestly, do you have anything other than MoveOn.org talking points?

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Ha ha ha... What's new? Another set of lies from the Obama. I understand why he thinks americans could be fooled with empty speaches but come on mister president. Does he really thinks the rest of the world is full of idiots as well?

-1 ( +1 / -2 )

US is in better shape than Japan and I am not worrying about it at all. US will get out of this mess somehow.

Global economists have been emphasizing that the focus should be Japanese sovereign debt.

Japanese sovereign debt/gdp ratio is the highest ( 225%)in the world economy and it is ready to go off the cliff by a blink of eyes to join Italy, Spain .and Greece.

I hope Japanese Gov can prevent the default against Japanese citizens. It is getting very ugly..

-2 ( +0 / -2 )

Thanks GW. I knew back in 2003 that something like this was gonna come and bite someone in the arse. I believe at the time I said, "I wouldn't want to be that guy." He must have started the dominoes falling as soon as he walked out the door. And I love to see the republicans blame everyone but themselves for this catastrophe.

-2 ( +0 / -2 )

Wolfpack: So President Obama holds a news conference during the middle of a market meltdown to reassure the markets that everything is fine.

Did you read the article? Or the headline? He said markets will rise and fall but US credit is still safe. The yield on bonds went down.

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Hmm...MoveOn.org - never heard of it. Tell me the URL and I'll check it out.

Meanwhile, many of you apparently get all your info from Sarah Palin's Facebook page. What part of "bond prices rose" do you not understand? Market players are NOT concerned about American creditworthiness; they are NOT concerned about inflation. If they were, bond prices would have fallen.

They ARE concerned that aggregate demand is low and falling, and Congress has left Obama with precious little room to fight it.

Really, for so-called capitalists, Tea Party types seem to lack any clue as to how capitalism functions.

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MR

And I love to see the republicans blame everyone but themselves for this catastrophe.

You obviously know zero about US politics if you think it is one party guilty here.

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Over 1,000% in debt due to total debt and liabilities. Who in their right mind would buy US debt?

Japan, this is what Noda Japanese Finance Minister said the other day !

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Well is the republicans responsible.... The Gramm-Leach-Bliley Act was passed along party lines by a Republican vote in the Senate which repealed the Glass-Steagall Act of 1933. This allowed investment banking and regular backing to be mixed again. Part of the act also made laws against "bucket shops" illegal. This allowed pure gambling on wall street. This setup the real estate bubble with derivatives to almost destroy the world financial system. The S&P dollar amount of debt reduction is less than 1/2 of the yearly cost of the US war in IRAQ and Afghanistan both wars pushed by the republicans with not budget to pay for it. The extension of the "Bush tax cuts" also costs more than the amount that S&P wanted to see. The only think that kept the economy afloat was the Tarp, QE, and the stimulus package which all ended in July. The FED has limited options now, congress is not going to pass a stimulus package and the EU is haven't start on any stimulus package for the PIIGS. It also looks like maybe France will be joining the PIIGS. This leaves Germany as the only effective economy in Europe. Can you say DEPRESSION!

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Breitbart,

No, I'm pretty sure it was just the one party. It's the Republicans that have insisted on tax cuts for the rich and two decade-plus long wars that cost us 10 billion dollars a month.

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BreitbartVictorious: You obviously know zero about US politics if you think it is one party guilty here.

Generally speaking, you're right. But with respect to the debt ceiling issue, you're not. Even the head of S&P's rating division made two major points when discussing the downgrade. One was that letting the tax cuts expire would have helped greatly. The other was that the debt ceiling should have been a no-brainer raise like it's always been. That's his polite way of saying that Republican policies were the two biggest factors in the downgrade. And the downgrade is the catalyst for the current stock market drop.

Yes, I know Republicans will simply point to Obama in the White House and say that he's sitting in the chair so ultimately he's the one responsible for Republican tactics that created the drop. But that's only because they need a scapegoat for their unworkable policies and they have supporters who will believe what they want to believe.

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Over 1,000% in debt due to total debt and liabilities. Who in their right mind would buy US debt?

@jeff, I just want to let you know today all US treasuries (2,5,10, 30 yrs) rallied with high yield. Basically, the treasuries are I.O.U. of US govt debt. If all countries are throwing their sovereign debts at flee market, US treasuries are the one everyone wants.  

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Nothing that Obama does reassures me. He needs to face a challenger in the primary.

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Typical of republicans to create the problem and then blame others for the consequences. They act like children really. The bush wars, the bush depression, the tea party insanity, the spineless republican leadership to cannot put country first is what has caused the market crash. Basically its financial terrorism by the republicans. The markets are dropping now more than after OBL attached the USA. Republicans must feel proud that they are damaging their country financially more that OBL did ten years ago.

-3 ( +0 / -3 )

ka_chan:

Well is the republicans responsible.... The Gramm-Leach-Bliley Act was passed along party lines by a Republican vote in the Senate which repealed the Glass-Steagall Act of 1933

Please come up with just one fact in your paragraph, The Gramm-Leach_Bliley Act was NOT passed along party lines: Senate: Republican Yes: 42 / No: 1 Democrat Yes: 38 / No: 7 House: Republican Yes: 207 / No: 5 Democrat Yes: 155 / No: 51

This was passed with BI-partisan legislation...

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S&P had Lehman Bros and AIG at AAA ratings the week that they crashed and burned. I think people who know nothing about how the markets actually work are putting way to much emphasis on the U.S downgrade.

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Well is the republicans responsible.... The Gramm-Leach-Bliley Act was passed along party lines by a Republican vote in the Senate which repealed the Glass-Steagall Act of 1933.

Bill Clinton signed it into law, I suppose we can say it's all his fault.

Even the head of S&P's rating division made two major points when discussing the downgrade.

Directly from the S&P's reason for the downgrade.

It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability…

Just to be sure folks understand what the real reason was for the downgrade.

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confidence? no way

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Let's hope the MSM and the lefty blogosphere keep repeating the "tea party downgrade" meme, further discrediting themselves.

Ordinary Americans are learning that Texas (economy the size of Canada) and Ohio (economy about the size of Belgium) saw their respective ratings upgraded by S&P.

Both states have Republican governors.

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"No matter what some agency may say, we've always been and always will be a triple-A country."

I love watching this pathetic charade, the neo-Marxist 'community organizer' trying to sound like Reagan. It must gall him when his handlers and the Lib Faculty Lounge Elite tell him it is now his only hope.

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Most investors are morons, why buy a 30-year US bond at 2.34% when inflation is over 10$

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Oops. I meant 10%

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Krugman wrote in his blog today:

"The Downgrade Doom Loop It’s not the whole story, but something like this threatens to develop:

US debt is downgraded, sparking demands for more ill-advised fiscal austerity Fears that this austerity will depress the economy send stocks down Politicians and pundits declare that worries about US solvency are the culprit, even though interest rates have actually plunged This leads to calls for even more ill-advised austerity, which sends us back to #2 Behold the power of a stupid narrative, which seems impervious to evidence."

Some Republicans remind me of that guy in LA the other day who tried to remove a hernia from his stomach with a butter knife: you just can't trust these guys with ANYTHING. Not even a butter knife.

-3 ( +0 / -3 )

Laguna,

Boy that Paul Krugman is sure an economic genius. Heck this guy promised an unemployment rate under about 7 percent after his first Keynesian flush of about 800 billion of borrowed money in the stimulus.

I guess it since that did not quite work out it has to be Bush's fault.

Honest question, would you actually trust a dime of your money to Paul Krugman to invest for you?

No thanks on my part to that guy.

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Republican candidates hoping to challenge Obama next year have placed blame for the downgrade on Obama, tying it to his larger economic agenda.

What else have the republicans accomplished this year? Oh, hating gay people, they are full of that.

-1 ( +0 / -1 )

Paulie Krugnuts wrote in his New Duranty Times blog today:

"Gold was at 1200 when we in the smart set were making fun of Glen Beck for pushing it on them gullible tea party types. It hit 1770 today. Stupid wingers."

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Boy that Paul Krugman is sure an economic genius. Heck this guy promised an unemployment rate under about 7 percent after his first Keynesian flush of about 800 billion of borrowed money in the stimulus.

That's not true. Krugman criticized the stimulus from the start as being far too small, and would not sufficiently dent the unemployment rate.

He predicted the meltdown of the economy back in 2003, when he published his book, The Great Unraveling.

Honest question, would you actually trust a dime of your money to Paul Krugman to invest for you?

I would probably trust a good economist more than I'd trust someone who doesn't know the difference between an economist and an investment analyst.

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Yabits,

Got it. Start digging a hole. Not enough to keep digging? Heck, borrow cash, keep digging. Still not enough cash , borrow some more keep digging hole.........Finally breakthrough and see daylight........Meet the landord......China.

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Interesting Yabits,

Investment analysts don't follow the advice or trends of a good economist? The difference being the advice of a good economist to an investment analyst is to what to actually invest in. interesting disconnect you have there.

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Our dear TEA Party brothers in arms, er..., members - our solicitations and congratulations...

For your conviction to bring down the US economy and with it the rein of the US as the preeminent democratic power in the world...

For your vision of a US run by large, greedy corporations that care only about milking every last penny from the US middle class...

For championing the abandonment of the poor, the elderly and the infirm...

For supporting every goal our late leader, Usama Bin Laden, taught us to sow discord, instigate intolerance, and ultimately win our struggle against your country...

Signed; Very truly yours in thought and deed, Al Qaeda - keep up the good work!!!

-3 ( +0 / -3 )

Yabits, some interesting points there. I suggested elsewhere recently that gold is the newest bubble and was immediately shot down by someone who obviously had no idea how bubbles work. Mah, some people refuse to listen to reason even if immersed in it like an Iraqi detainee in a Cheney internment camp waterboarding exercise. Their tenaciousness in their ignorance is impressive, though.

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Got it. Start digging a hole. Not enough to keep digging? Heck, borrow cash, keep digging.

Sounds like you're describing a nation that throws more money down the military hole than the rest of the world combined.

-1 ( +0 / -1 )

Investment analysts don't follow the advice or trends of a good economist?

I am sure they do, but it still comes down to picking individual companies or funds, stocks or bonds. Economists work on a much longer time horizon, however, and they don't spend much time analyzing individual organizations. Krugman, for example, was one of those who pointed out the growing bubble in housing and what could happen when that bubble burst. A good analyst would have steered clear of housing-type investments -- as nearly every Canadian bank did, which is why they're relatively in such great shape today.

I suggested elsewhere recently that gold is the newest bubble and was immediately shot down by someone who obviously had no idea how bubbles work

Gold saw it's biggest percentage gains during the period from 2001-2008, which coincided with Bush's "strong dollar" policies. Now is the time to be selling gold to all the lemmings who follow folks like Beck. The people selling gold into this bubble were smart enough to pick it up years ago, and will eventually buy it back from the lemmings on the way back down.

-1 ( +0 / -1 )

Yabits,

Got it....Sell gold right now. What should I buy now after I sell?

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Sell gold right now. What should I buy now after I sell?

It will be from a list of stocks hitting new lows -- only after charting indicates a turnaround in their momentum.

Was Chrysler a good investment at $1/share back in 1980? A: Darned right it was. (Gold was also peaking then too -- to around $1000/oz -- before retreating back to below $300. Silver hit over $50/oz. before settling under $3.)

-1 ( +0 / -1 )

It will be from a list of stocks hitting new lows -- only after charting indicates a turnaround in their momentum.

Was Chrysler a good investment at $1/share back in 1980? A: Darned right it was. (Gold was also peaking then too -- to around $1000/oz -- before retreating back to below $300. Silver hit over $50/oz. before settling under $3.)

Got it......Buy the cheap stocks now. Just a small question, if they don't pan it. Can count on a taxpayer bail-out? To big to fail and all that. After all your a taxpayer and your cash is good as mine.

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Gold yields no interest, it creates no value - it appreciates and depreciates based on investor whimsy. And its current excessive valuation is driving the students at my university crazy: they'd like to use it for something useful, as a catalyst. Still, they're learning to turn it into nanoparticles embedded in carbon, which actually works much more efficiently, so perhaps the greed is not all bad.

I'd invest in material manufacturers if I didn't have two school-aged kids sucking up my savings.

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Paulie Krugnuts wrote in his New Duranty Times blog today:

That's it for my favorite post today: it is a combination of "let's make fun of intellectuals" and "let's make fun of the 'mainstream media'" all rolled into one inane phrase followed by - well, it was so silly that I've forgotten.

Ideas are the genesis of action; action is the hand of creation. The current trend in the US of mocking intellectuals is dismaying, and I'm afraid that the results of amateurs at the wheel - and this began back in 2000 - is becoming frighteningly manifest.

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He predicted the meltdown of the economy back in 2003, when he published his book, The Great Unraveling.

As an Enron adviser, he had to do something, eh?

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“Markets will rise and fall, but this is the United States of America,” Obama said. “No matter what some agency may say, we’ve always been and always will be a triple-A country.”

Ha ha ha ha.... Ha ha ha ha...

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You people know nothing about gold or silver. It's been in a bull market for 11-years and it's not even close to being in a bubble. It's a store of value, an investment, and a form of savings. The bull-market won't be over until the economy becomes stable, which could take decades.

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I'll say it once again: American debt is junk debt.

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As an Enron adviser, he had to do something, eh?

Wow. It is very interesting that the way to try to take down a liberal is to associate them with crooked, right-wing conservatives. Yes, Krugman served as the only liberal on an advisory panel for Enron -- a "do-nothing" group, as Krugman relates -- in 1999. This was long before W had his oil buddy, "Kenny Boy" Lay, (Enron's CEO) over to the White House for sleepovers.

It would be more interesting if any right-winger could demonstrate how Krugman's association contributed in any way to the company's downfall, or whether Krugman was witness to the malfeasance that brought the company down. Of course, right-wingers can't show any of that: for the brain-dead, associating his name with Enron is sufficient.

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